This is an example of conspicuous consumption—the idea that we buy things not just for their utility or enjoyment, but to signal wealth and status. The value isn’t in the banana itself; it’s in the statement it makes to others.

There are countless examples of conspicuous consumption: from expensive cars and lavish homes to jewelry and ornate Chinese vases. In fact, conspicuous consumption is as old as the Western canon of art. From the Renaissance onward, wealthy collectors have commissioned extravagant artworks—not just for their beauty, but to showcase their splendor and magnificence.

But Justin Sun’s conspicuous consumption came with a twist. Instead of posing a mixed signal and making us wonder whether he truly liked the artwork or simply wanted to show off, it was a deliberate, comedic display of wealth. By eating the banana, Sun made it clear that the artwork’s physical form was irrelevant—the true value lay in the act of buying it, the spectacle it created, and the status it conferred. His performance wasn’t about owning Comedian but about proving he could afford to consume it, both literally and financially, without hesitation.

The equivalent of this would be purchasing a mansion only to set it on fire; an Aston Martin only to drive it into the river; or a Birkin bag onto to throw it into the bin. The value is all in the ability to purchase and the act of destruction.

Should we want more of this? Probably not. There’s some economic utility in the money Sun transferred over to the artist, Maurizio Cattelan. Perhaps that sum will allow him to focus on his technique and create actual art. But if the goal was to support artists, there are far better ways to do so than turning “philanthropy” into a publicity stunt.

I’d like to see more money flow toward artists who need it—those who could use the support to take creative risks and push their work further. But if we’re serious about that, we should focus on maximizing impact rather than maximizing spectacle.

Irrationally yours,

Dan Ariely

When we walk into a gallery, we like to believe we would be able to rationally assess the artwork and gauge its price based on its condition, materials, and iconographic and art-historical quality. Ideally, we also evaluate the piece how it resonates with us, what it means, and what it’s worth in that particular moment.

But that’s far from the case. On the contrary, much of how we discern the value of a piece is influenced by a psychological phenomenon known as anchoring.

Anchoring occurs when an initial piece of information—typically a price tag, though not necessarily—becomes the reference point from which we judge everything that follows.

Imagine looking at two artworks. One is priced at $10,000, and the other at $5,000. Logically, you should consider the artworks on their own merits, perhaps even factoring in their provenance and innovativeness; then, you should determine what each piece is worth and what you would be willing to spend. To an extent, the lack of price tags in galleries is supposedly there to encourage you to do just that.

But that’s not how it works, is it?

You follow the label’s instruction to “inquire,” and the gallerist(a) gives you the price. The moment you hear $10,000, your mind locks onto that sum. You might think, “$10,000? That’s too much. Perhaps I can offer $8,000 or $8,500.” Then, you look at the $5,000 piece and think, “$5,000 seems like a steal—perhaps this is worth $6,000, or at least $5,500.”

Here’s where it gets interesting: you’re no longer evaluating the art on its own. You see its value relative to the suggested price. That’s anchoring at play. The initial number shapes your perception, anchoring you to a range that’s too close to the original. Whether you realize it or not, that initial price influences both your decision-making and your willingness to pay.

So, the next time you stop by a gallery, remember: more often than not, the price we pay for art is influenced less by the piece itself; it’s about how firmly we’ve become anchored to a number.

Irrationally yours,

Dan Ariely

You play on scarcity.

As early as the 1700s, William Hogarth understood scarcity motivated collectors to track his career and collect his work. Limited edition series–like A Harlot's Progress and Marriage A-la-Mode–only included around 1,000 prints. They were marketed as not merely “limited;” but “better,” for they were made with better ink and paper, and thus of higher material quality. This strategic use of scarcity tapped into a fundamental principle of behavioral economics: scarcity.

Limited availability increases perceived value and urgency. When we believe a product is rare, we are more likely to assign greater worth to the item in question. We are also more likely to rush into buying it–and regret it later.

Consider modern-day marketing formulas: “Only 3 seats left;” “Limited stock available;” “Get it before it’s too late;” and “Act now–last chance to buy.” The list goes on. Regardless of phrasing, companies deliberately limit supply to drive demand, amplify appeal, and create a sense of exclusivity.

Scarcity poses a call for action. It works on us like a hot emotional button. “I must hurry,” we think. “The deal’s almost over.” That’s when other powerful emotions come in: on one side, there’s the fear of losing (FOMO); and, on the other, there’s the desire to not regret things later. “Let me get it now,” we decide, and we rush to buy. When stock is unlimited–or perceived as such–we often choose to wait and postpone purchase, often endlessly. When it is limited, the rush of emotions makes us buy now, even if we regret it later.

That’s also true on the luxury market. It is no wonder Andy Warhol, too, revealed his prints in limited editions; Jeff Koons released a limited edition of his signature Balloon Dog figures; Louis Vuitton limited its Artycapucines line to 200 bags, which feature artworks by contemporary artists like Vik Muniz and Zeng Fanzhi. Scarcity sells.

So, a few words of caution: When we encounter signs of scarcity, we should pause and ask ourselves—are we buying the product because it’s right for us, or are we simply caught up in scarcity and acting on impulse?

Irrationally yours,

Dan Ariely

Why does this matter?

Because it defies the conventional wisdom of ownership. We buy things to experience them—to see them, use them, or show them off. Art, in particular, is supposed to be looked at. So why do some of the world’s most valuable paintings spend lifetimes in tax-free storage, untouched and unseen?

You could argue it is for investment purposes, and you would be right, at least partially. Art tends to appreciate in value, and the freeports of Geneva offer a loophole—no taxes, no duties, no prying eyes. But let’s abstract from that for the moment. Let’s see art not as an asset that is not merely financial but also psychological.

There is a benefit to owning things no one else sees or knows about. And the benefit is that we know about their existence in our possession, and that shapes who we are and how we think about ourselves.

Imagine wearing Ferrari-branded underwear. Or even Agent Provocateur. No one sees it. No one knows. But you do. The logo, the materials, the craftsmanship, and the sensations it arouses exist solely for you. It’s a secret indulgence.

Now imagine a slightly different scenario. Say, for example, that you have a Picasso locked in a crate and buried in a Swiss warehouse. You also have a few drawings by Parmigianino and a sculpture by Giambologna. These are not shown or enjoyed, as most purchases would be. But they are in your possession, and they nonetheless reflect who you are.

That’s a fascinating part of our psychology. The idea that existence/ownership, in itself, is enough. That mere possession carries meaning and reflects the self, even if the thing possessed is hidden from the world.

Where is the utility in that, you might ask?

It lies in the satisfaction of owning something valuable entirely for the sake of personal fulfillment, without the need for external validation or visibility. We don’t recognize this enough, and maybe we should do more of it. Maybe.

If you were going to own something for the sake of ownership, what would it be?

Irrationally yours,
Dan Ariely

As with many things in economics, our perception of value isn’t just about the object itself; it’s about the relationships and incentives woven into it. NFTs, or non-fungible tokens, are unique digital certificates of ownership. Because they are stored on the blockchain, they cannot be copied, substituted, or subdivided.

Unlike traditional artworks, however, NFTs only exist digitally. But ownership of art—whether physical or digital—has always been about more than just possession. It’s about connection.

Take some artworks I own, for example. I have a statuette that the wife of a dear friend of mine made for me. It’s titled “The Professor.” You can guess who it depicts. I also have a drawing of a poppy field and a painting that used to hang in my grandparents’ home. All of these artworks bear meaning that’s personal to me. Within the context of my home, these artworks signal my connection to the people who made and owned them.

Like most collectors, I strive to own works that don’t merely suit the interior design of my home and beautify my space; but also communicate my connection to the artists and appreciation of their work. In most cases, a glimpse of that connection is the prerequisite for purchase.

But back to NFTs. They take that connection and stretch it further. They make it more meaningful.

Say, for example, that I bought 90% of an NFT, leaving the remaining 10% in the artist’s ownership. Now, if I sell the piece for a profit, the artist receives a share of that profit, too. They remain invested in their work, and I remain connected to them—not just emotionally, but financially. Instead of being a passive collector, I become a partner in the artwork’s journey (and the artist’s career). That’s a lot cooler than merely owning 100% of the work and hanging it on my wall, isn’t it?

That’s the fascinating thing about NFTs. They’re redefining how we view art and its ownership.

For centuries, owning art has been a one-way street: you acquire the piece, you hang it on your wall, and that’s where your relationship with the artist (or the artwork’s evolution) ends. Of course, a painting by Degas or Picasso might make you feel connected to their oeuvre, but that connection is largely symbolic—an appreciation from a distance. With NFTs, on the other hand, ownership surpasses possession and becomes participation. The artist and I are linked—not just through meaning, but through a shared vested interest in the work’s value and performance.

Now imagine visiting a gallery–even digitally–where you’re not a passive viewer but a shareholder. You partially own the displayed works. Wouldn’t that change your interaction with the art? Wouldn’t it make you care more, and appreciate the art more thoroughly? For me, that would be a yes.

Is this the direction NFTs are taking us? I’m not sure. But it’s where I hope it goes. I’m rooting for new models of shared ownership, deeper relationships between artists and collectors, and a redefinition of what it means to own and value art.

Irrationally yours,

Dan Ariely

Participants perceived paintings in heavier frames as more valuable than those in “normal” frames, even when the art itself had not changed. They were also willing to pay more.

You might think this is irrational. A lighter frame would make the painting easier to transport and hang.

Sure, but it’s not about the frame. This boils down to our tendency to appraise art holistically. When we evaluate a painting, we factor in a set of irrelevant factors. We factor in the weight of the object, the temperature of the room, the ambiance of the gallery, and the quality of the lighting.

These elements, though unrelated to the value of art itself, shape our perception. A dimly lit, cold and cluttered gallery might make a masterpiece feel unimpressive, while a sleek, high-end showroom will elevate even a mediocre piece. Side factors like these signal importance, permanence, and even artistic merit—or the lack thereof–and trick our brains into equating physical heft and presentation with substance and value.

Irrationally yours,

Dan Ariely

That’s the mere-exposure effect at play.

Also known as Fluency and Familiarity, this is a psychological phenomenon that predisposes us to like things and people merely because we are familiar with them.

Think of it as a “lubricant” to the brain circuitry. Every time we see the same thing, the “circle” becomes more “lubricated,” easier to process. Thus, the more we see someone, the more likeable we find them to be.

The same goes for art. The more often we gaze at a picture, the more we grow to like it. That–along with the Endowment Effect–explains why we tend to overvalue what we already have.

When a picture has been hanging in our living room for years, and we’ve glimpsed at it every time we’ve sat down for dinner, we’ve naturally programmed our brains to like it more. We’re ready to justify and glorify its aesthetic appeal even if, objectively speaking, it’s of average quality.

Familiarity breeds appreciation.

Perhaps that’s the scientific explanation behind the phrase that art is “an acquired taste.” Because it really is.

Can you think of a time when this has happened to you? I certainly can.

Irrationally yours,

Dan Ariely

There’s something fascinating about Kintsugi—the Japanese art of mending broken ceramic vessels with gold, silver, and platinum. Kintsugi does not involve your usual kind of restoration, which seeks to obscure all traces of damage. On the contrary, it treats breakage and repair as part of the piece’s history, as something to be highlighted and celebrated.

Legend has it Kintsugi began in the fifteenth century when a Japanese shōgun sent a fractured Chinese tea bowl for repair. Once the piece was returned, the commander-in-chief found its simple metal staples visually dissatisfying; there had to be a more beautiful way to repair the damage. That’s how the ‘golden repair’ method was born. In mending gaps and fractures with gold, the Japanese believed they were rediscovering beauty in brokenness–an idea already quite prevalent in Zen Buddhism.

Kintsugi pieces tend to be fully repaired. Breakage thus does not change their function; it just equips them with more history–and a set of gold straps to account for it. As soon as they are repaired, they go back to serving as bowls, plates, or cups. Their value does not diminish either; if anything, Japanese culture treasures them more than before.

But then there are the strange ones, too, which miss crucial pieces and aren’t fully restored. You couldn’t use them at optimal capacity even if you tried. But that’s where the beauty is. The missing parts are no longer treated as flaws to be disguised; they are starting points of meditations on ideas of loss, synthesis, improvement–of crisis and cure.

I own one of these. A Kintsugi bowl that is still, fundamentally broken. Gold traces its fractures, but the large gaps remain. If you look at it really creatively, you might think it looks like a baseball glove. It cannot contain soup, rice, or tea. But it could hold something—a baseball, some ideas, attention. And maybe that is enough.

That’s what I love about Kintsugi: the idea that damage does not diminish value, even if it alters function. Kintsugi pottery is still beautiful, even though–and perhaps, because–it is imperfect.

As for why this appeals to me so much? You can probably guess.

Irrationally yours,

Dan Ariely

That’s wrong on two grounds.

First, there’s the issue of technical skill. Being a master at painting–just like becoming a top NBA player or a renowned poet–takes years of practice. As outsiders, we forget that. We assume that when something looks simple, it must have been easy to make. But simplicity is frequently the product of years of deliberation, not a lack of effort. We disregard the effort that goes into refining technique, developing style, and mastering materials. We simply don’t understand we lack the technical skill to paint as the masters do, even when their pieces appear abstract to the point of effortlessness.

But then there is also hindsight. Even if we could somehow paint Malevich’s Black Square, we would not be “creating” but “copying” what we’ve already seen. The ability to recreate the product does not suggest we could have created the idea, design, composition, or color scheme. Originality requires vision, knowledge, familiarity with previous sources, and the courage to challenge the canon. Revolutionary art only emerges when the artist surpasses everything that has preceded them and defies the cultural landscape of the time.

Thus, when exclaiming we could have “done this,” do we mean we could have replicated it or innovated the idea? It’s difficult, if not impossible, to judge how likely we are to come up with an original thought. This distinction is critical, as true artistry lies not just in execution but in the originality of creation.

It is no wonder, then, that Picasso observed, “It took me four years to paint like Raphael, but a lifetime to paint like a child.”

Irrationally yours,

Dan Ariely

Whether we realize it or not, our perception of effort impacts of evaluation of art. We tend to prize things more highly when we think more effort goes into them. Virgin on the Rocks clearly took Leonardo some time–decades, in fact. Composition VII, on the other hand, was completed in just three days. We sense this intuitively, and we ascribe value judgments to two paintings that can never be compared objectively.

One of the key differences between these works is that Leonardo’s appears to be the result of sustained effort; while Kandinsky’s emerges as the sporadic product of an idea. As wrong as this may be, we therefore perceive the former as more valuable; we equate effort with value. That’s why we’re willing to spend less on art that appears easy to make–unless, of course, there’s a master’s name attached to it.

Effort is a cue that leads us to evaluate an artwork as worth more.

This is where size comes in. We’re drawn to think that bigger artworks require more effort than their smaller counterparts. Although that’s not necessarily true, we’re still more likely to evaluate a giant canvas as worth more than a small one, even if the latter is of higher technical and artistic merit.

There’s another edge to this, too. Abstract works like Jackson Pollock’s, be those Number 1A or Number 31, tempt us to think we, too, could have created them. This, in turn, decreases the object’s perceived value and subdues our willingness to spend. Naturally, the conviction that “I could have made this” is very wrong, and I will share why in another post.

Irrationally yours,
Dan Ariely

As much as publicity plays a role–and helps shape reputations, as we’ve mentioned previously–, the urge behind collectors’ incessant and illogical bidding lies elsewhere. Auction rooms are rife with competition, with collectors placing bids via bidding paddles, phones, and intermediaries. It is so intense it bores into your skin. The intensity of the bidding experience, along with the fast climbing of prices and obvious competitors, triggers two emotions: on one side, the desire to win the bid; and, on the other, the determination not to lose. Thus, action fever sets in.

Auction sales are preceded by an estimate–the rough value of what the auction house thinks it can get for a given item–and begin with a starting bid. Once the actual bidding starts and buyers notice the competition, adrenaline is released. They become extra attached to the artwork. “It’s theirs,” they think. They have to have it. But at this point, it is not just about buying; it’s about winning. Or, at the very least, not losing.

The allure of victory and its even stronger counterpart, the fear of loss, lead bidders to deviate from their original bidding strategies and spend more. Many end up buying artworks they don’t even like, all because they could simply not let go.

That says a thing or two about the actuality of the art business. While auctions should hypothetically be a good mechanism to determine people’s willingness to pay, anyone who’s attended one will say it all depends on who’s in the room that day. The achieved price is hardly ever “fair,” not to the buyer, and certainly not to the contemporary artist, whose long-term market is set to take a downturn when demand fails to sustain these emotion-driven peak prices. At this point, auction fever has turned the art market into a high-stakes battleground where impulse and irrationality overshadow intention and reason, and prices reflect the thrill of the chase more than the true value of art itself.

Irrationally yours,

Dan Ariely

(P.S. This is especially true for Evening Sales, which offer bidders a once-in-a-lifetime chance to purchase an original artwork — be it a painting by Botticelli or Filipino Lippi, or a canvas by Tamara de Lempicka. It is not exactly the same for lower-end auctions, specifically those selling prints and multiples, as clients are more likely to understand they will have another opportunity to purchase a print from the same edition for a lower price.)